UPHOLD CEO details plans to enable Staking with XRP

UPHOLD study ways to allow yields in XRP, This despite the fact that the currency network does not operate PROOF-OF-STKE. The solution detailed by the CEO involves the use of a token wrapped in Flare Network.

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• The proposal would imply creating a wrapped version of XRP wearing Flare Network
  
• Direct Staking is not possible, since XRP It does not work with Pos
  
• The CEO of UPHOLD See the plan as “Viable and promising”, but faces legal challenges in the US.

UPHOLD, The recognized digital asset platform with presence in more than 140 countries and more than 10 million users, is evaluating the possibility of offering yields with the Token XRP of Ripple, This despite the fact that the network does not work through a staking model as other ecosystems do.

Simon McLoughlin, CEO of UPHOLD, It was the one who offered more details about the company’s plans in an interview for the medium The block, where he indicated that they want to boost this initiative because they see potential in allowing users to generate passive income with their tokens XRP.

“It’s a challenge because XRP is not a proof-fac-take network (POS)”McLoughlin explained. “There is no staking mechanism in which one can trust.”

In this type of networks, users can block their assets to validate transactions and, in return, receive rewards. But XRP operates on a different model, so UPHOLD Look for creative solutions to meet the demand of its users, and one of them is through Flare Network.

FXRP in Flare Network

The solution proposed UPHOLD involves Flare Network, A network Blockchain in growth that McLoughlin describes how “flourishing”. This ecosystem allows the creation of wrapped assets (Wrapped), that is, representative versions of other cryptocurrencies that can be used in applications DEFI Within its ecosystem.

According to McLoughlin, the model would be that users block a specific amount of XRP in the reserve of UPHOLD. Subsequently, there would be a calculation of its value and a token wrapped in Flare called FXRP. This asset could be used to generate yields within protocols DEFI of said ecosystem.

“The depth of liquidity in the Flare Pools makes viable launch a beta staking test for a limited user group,” The Executive explained.

Legal implications in the US.

Although the mechanism is promising, its implementation in the United States could face regulatory obstacles. The main fear lies in wrapping XRP and offer yields can be interpreted as the creation of an unregistered financial valuewhich would submit to the asset before the jurisdiction of the Bag and Securities Commission (SEC).

“We have to make sure that, by wrapping XRP and move it to another network, it is not interpreted as if UPhold were manufacturing a value that creates gain expectations,” McLoughlin said.

However, the CEO pointed out that the recent pronouncement of the Sec, In which it is indicated that the staking does not necessarily violate the laws of values, it is a positive signal.

Although restrictions in the United States could slow down the launch of the program, McLoughlin is more optimistic about its implementation in other regions.

“We are sure that in certain parts of the world we will be able to advance with this XRP route wrapped,” affirmed.

The plans of UPHOLD

The movement also coincides with other company recent initiatives. UPHOLD announced the launch of a new debit card and a direct deposit bonus program in the United States, which will allow users to receive up to 4% rewards in XRP, which reinforces the company’s commitment to this digital asset.

Interest in a Staking System for XRP It shows how ecosystem actors seek to innovate even with cryptocurrencies that, due to their design, are not oriented to certain practices such as the Proof-OF-Stake.

Collaboration with networks such as Flare and the development of alternative mechanisms could mark the beginning of new forms of participation in the sector DEFI For traditional tokens.

Written article with the help of an AI content editor, edited by Angel Di Matteo / Diariobitcoin

Original image of UNSPLASH.

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